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State Auto Financial reports revised financial information.

State Auto Financial Corporation reported that it is revising previously disclosed financial information related to accounting for its pension and postretirement benefits. STFC had been pooling the net liabilities and the unrecognized actuarial gains and losses along with prior service costs recorded in accumulated other comprehensive income for pension and postretirement benefits to affiliated companies pursuant to a quota share reinsurance agreement or pooling agreement. However, STFC and its auditors have determined that such pooling is not appropriate for these items. Amounts recognized as pension expense continue to be appropriately pooled in each period presented. As a result, STFC's balance sheet has been revised to reverse the impact of pooling these items by increasing the reported pension and postretirement benefits liability and reducing reported stockholders' equity by recording additional unrecognized actuarial losses and prior service costs within accumulated other comprehensive income at each reported balance sheet date. For these adjustments, associated deferred tax benefits have been established at each reported balance sheet date. For the year ended December 31, 2017, additional deferred income tax expense of $7.1 million was recorded to reflect an adjustment to deferred taxes for the reduction of the corporate income tax rate in connection with the Tax Cut and Jobs Act of 2017. Related earnings and book value per share amounts have been revised accordingly. These adjustments are not material to STFC's previously issued financial statements. STFC has included with this release a new disclosure for book value per share excluding accumulated other comprehensive income, net of tax, along with the appropriate non-GAAP measurement reconciliation. As a result of the foregoing changes, STFC's fourth quarter 2017 net loss was $13.8M, or 33c per diluted share and net loss from operations per diluted share was 65c. For the year ended 2017, STFC's net loss was $17.8M, or 42c per diluted share and net loss from operations2 per diluted share was $1.43. The fourth quarter and year ended 2017 net loss and net loss from operations included a charge of $43.5M, or $1.03 per diluted share, related to the enactment of the TCJA.

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Publication:The Fly
Date:Mar 4, 2019
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